Stress Testing: a Bank’s Perspective

In a context which is increasingly volatile and unpredictable, with new challenges emerging on a continuous basis, it is important that both banks/financial institutions and supervisors keep a good view on possible, more or less likely outcomes so that they are prepared by building a more resilient financial sector. By being prepared for different outcomes banks can safeguard their future capital base in a way that allows them to continue their activities such as lending to the economy. Stress testing is a key tool in this respect and its importance will only grow.